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Propensity is defined as a natural tendency. An example of propensity is an inborn love for writing. pl. -Â·ties. 1  a natural inclination or tendency; bent.  Obs. favorable inclination; bias (for)
The term average propensity to save is used to show the amount of money that is saved by an individual from his earnings. Average propensity to save is normally applied in the case of families. This concept is normally conveyed in terms of a percentage of the disposable income of a particular family.